Anger over narrow networks

Anger over limited choice of doctors and hospitals in Obamacare plans is prompting some states to require broader networks — and boiling up as yet another election year headache for the health law.

Americans for Prosperity is hitting on these “narrow networks” against Democrats such as Sen. Jeanne Shaheen of New Hampshire, whose GOP opponent Scott Brown has made the health law a centerpiece of his campaign to unseat her. And Republicans have highlighted access challenges as another broken promise from a president who assured Americans they could keep their doctor.

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It’s not just a political problem. It’s a policy conundrum. Narrow networks help contain health care costs. If state or federal regulators — or politicians — force insurers to expand the range of providers, premiums could spike. And that could create a whole new wave of political and affordability problems that can shape perceptions of Obamacare.

Here’s the dilemma: People hate being told they can’t go to the doctor of their choice. But many hate higher premiums more. Tightening up the network is one of insurers’ best tools to keep costs down.

The debate is playing out now among federal regulators, and in state insurance departments and legislatures all over the country.

“People have to recognize it’s a trade-off, and I’m not sure they do yet,” said Matt Eyles, an insurance expert at the Avalere Health consulting firm. “Broader access comes at a cost, and what’s the right balance between access and cost is an age-old question in health care.”

The Affordable Care Act sets out general guidelines directing insurers to include enough doctors and hospitals to provide timely access to care, including specialty care. But it does not spell out what that means, leaving it to states to fill in the blanks.

So far, just a handful of states have moved to ratchet up their standards. They’re mostly blue states that built their own Obamacare exchanges, including Connecticut, New York, Washington and California. But since the beginning of 2013, more than 70 bills have been introduced in 22 states to clarify the network rules, according to the National Conference of State Legislatures.

“Every indication that we’ve received … from think tanks, physicians and consumer advocacy groups, is that the most important factor for individuals purchasing coverage through the exchange is price,” said Kim Holland, executive director of state affairs at the Blue Cross Blue Shield Association, which represents Blue Cross plans in all 50 states. “If states try to prohibit our ability to partner with physicians in a meaningful way,” prices will go higher, she added.

But regulators are feeling the pressure to act.

A recent Commonwealth Fund survey found that about three-quarters of Obamacare enrollees are satisfied with their plans, but complaints of buyer’s remorse are common, too.

One consumer group representing angry patients filed a lawsuit this month against Anthem Blue Cross in California. And a nationwide group of insurance regulators is currently working to develop model legislation — last updated in the 1990s — to guide states’ policy.

The effort is drawing intense scrutiny from insurers, doctors, hospitals and consumer advocates.

Insurers have been experimenting with narrow networks for more than 20 years, steering patients to doctors and hospitals that contract with plans to keep costs down, and offering limited if any coverage of providers that don’t, except in emergencies. Basically, that’s the heart of managed care and HMOs. In the 1990s, incentives that led health plans to deny needed care sparked a harsh backlash from consumers and doctors that haunts the insurance industry to this day.

But plans have been tailoring networks in recent years to focus on reducing unnecessary spending and coordinating care while also ensuring that quality standards are met. And people have also gotten used to some limitations on provider choice.

Obamacare didn’t create the trend, but it did highlight it, as insurers sought to make premiums as attractive as possible in the new market. About 70 percent of the lowest-cost exchange plans were built on narrow networks this year, according to the consulting firm McKinsey, and on average they cost 13 percent to 17 percent less than comparable plans with broader networks.

Advocates of narrow networks note that they don’t have to be a problem in states where consumers had a lot of plan choices — narrow networks, broad networks, high deductible and other configurations. As long as people understand what they’re buying, they can accept trade-offs.

But that’s not what’s happened everywhere. In New Hampshire, for instance, Anthem Blue Cross and Blue Shield was the only insurer on the market, and it cut 10 of the state’s 26 hospitals out of its network.